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Sale and Purchase Agreement signed for Mooiplaats
Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
22 September 2014
Sale and Purchase Agreement signed for Mooiplaats
Coal of Africa Limited ("the Company" or "CoAL") is pleased to announce that it has signed a Sale
and Purchase Agreement (“SPA”) with a wholly owned subsidiary1 of Blackspear Holdings
Proprietary Limited, for the disposal of the Mooiplaats Colliery (“Mooiplaats”) for a gross
consideration of ZAR250 million (US$23.47 million) in cash. Upon fulfilment of all conditions
precedent including the receipt of regulatory approvals consistent with a transaction of this nature,
the consideration will be settled in two tranches, with the first tranche of ZAR150 million (US$14.084
million) expected to be received during the first quarter of CY2015. The second tranche of ZAR100
million (US$9.39 million) is payable on the earlier of 12 months from the payment of the first tranche
or 30 November 2015.
Blackspear is required to provide CoAL with evidence of funding on or before 31 October 2014, with
guarantees in form and substance satisfactory to CoAL by 31 December 2014, pursuant to which
Blackspear will commence monthly payments from November 2014 of ZAR2.3 million (US$0.21
million) increasing to ZAR4 million (US$0.375 million) from February 2015 until such time that the
conditions with respect to the first tranche payment are met.
Mooiplaats, the thermal underground colliery in the Ermelo Coalfield in the Mpumalanga province of
South Africa, was deemed non-core by CoAL on 30 June 2013 and placed on care and
maintenance from 1 October 2013.
The sale of Mooiplaats was one of two remaining priorities under the Company’s five-point
turnaround strategy. The final outstanding priority is to secure the funding of, and regulatory
approvals for the wholly-owned Makhado coking coal project, located in the Soutpansberg coalfield,
South Africa.
1 K2014118416 PROPRIETARY LIMITED trading as Blackspear Coal.
Subject to completion of the proposed equity fund raise, announced on Amount
26 August 2014, the Company intends to use the expected proceeds of
US$64.9 million (£38.225 million) together with consideration for the
disposal of Mooiplaats primarily as set out below:
To settle the outstanding acquisition consideration of the tenements US$30 million
comprised in the Company’s Greater Soutpansberg Project.
To implement modifications to the existing plant at the Vele Colliery. US$25 million
To resolve the current contractual exposure resulting from the take or US$10 million
pay provisions of the throughput agreement between the Company,
Terminal De Carvao Da Matola Limitada and Grindrod Corridor
Management Proprietary Limited.
To settle the Investec Bank Limited working capital facility in US$6 million
accordance with its terms.
To fund the Company’s expected working capital requirements for the US$17.4 million
next 18 months.
David Brown, Chief Executive Officer of CoAL, commented:
“Following the signing of the SPA for Mooiplaats, CoAL has agreements in place to sell all of its
non-core assets identified during the turnaround strategy. On completion of these sales and the
proposed equity financing, we will be in a position to unlock the intrinsic value of our coking coal
assets in South Africa and create value for all our stakeholders. It has been an extremely
challenging environment in which to execute our turnaround strategy. This achievement is
testament to the management team, and I look forward to our next chapter of growth.”
About Mooiplaats
Mooiplaats contributed a cash loss of ZAR202 million (US$19.23 million) for the year ending 30
June 2013 and as at 31 December 2013, was classified as an asset held for sale with a net asset
value of US$19.040 million. The Company has previously written off ZAR1.9billion (US$181.5
million) in impairments on Mooiplaats up to December 2013, and coal prices have deteriorated even
further since then.
About Blackspear
Blackspear is a privately-owned business that is focused on operating and developing a portfolio of
coal assets in South Africa. Blackspear’s key assets and operations include the Puleng operations
in the Middleburg district of Mpumalanga, the Thutsi coal operation in Ermelo and the Overvaal
project in Ermelo. The Overvaal project consists of 252 million tonnes of gross tonnes in-situ
(“GTIS”) and is the resource contiguous to Mooiplaats.
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
Michael Meeser Chief Financial Officer Coal of Africa +27 10 003 8000
Celeste Harris Investor Relations Coal of Africa +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Jos Simson/Emily Fenton Financial PR (United Kingdom) Tavistock +44 20 7920 3150
Chris Sim/George Price/Jeremy Ellis Nominated Adviser Investec Bank plc +44 20 7597 5970
Charmane Russell/Jane Kamau Financial PR (South Africa) Russell & Associates +27 11 880 3924 or
+27 82 372 5816
Investec Bank Limited is the nominated JSE Sponsor
About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company operating in South Africa. CoAL’s key projects include the Vele
Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL’s Makhado Project (coking and thermal coal).
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